Are you considering firing an employee who is on vacation in order to avoid a scene at the office? We recommend that you reconsider this strategy for both legal and other reasons.
All employers owe their employees a duty of good faith and fair dealing in the manner of termination. This duty is implied as a term in each and every employment contract. If an employer breaches this duty, a court may award an employee who brings an action for wrongful dismissal additional damages, known as aggravated or punitive damages, above and beyond any requirement to pay severance.
Terminating an employee while he is on vacation, a time that is intended to be relaxing and enjoyable, can cause undue stress for the employee, resulting in an award of aggravated damages. For example, in Bigelow v. T.C. Mobile Vessels Ltd., the Alberta Provincial Court found that terminating an employee on vacation contributed to the employer’s breach of the duty of good faith and fair dealing in the manner of termination, and awarded the employee $1,000 in additional damages.
Terminating an employee while he is on vacation also restricts the employer’s ability to provide working notice to the employee. Under section 67 (1) of the BC Employment Standards Act, working notice given to an employee has no effect if the notice period coincides with a period during which the employee is on vacation. Therefore, if the employee is on vacation, the employer must either suspend the notice period until the employee returns to work or pay that employee compensation in lieu of notice.
Terminating an employee while he is on vacation also leads to practical difficulties. In particular, it complicates the next steps in the termination process. For example:
- How will the termination be communicated to the employee?
- When will the employee be able to pack up his office?
- How long will the employee be provided to return company property?
- Will the employee have sufficient time to convert benefits upon his return from vacation?
- Will the employee lose benefits, such as travel insurance, if benefits are discontinued while he is on vacation?
- What timelines will be provided to the employee to obtain legal advice with respect to a severance package?
Reputation and Employee Morale
Last, but definitely not least, terminating an employee on vacation can have negative consequences for a business’ reputation and employee morale. For example, the business may lose valuable employees who are either fearful that the same thing will happen to them, or who are turned off by the company’s treatment of their co-worker.
Part of terminating an employee from a sustainable employment perspective is to try, as much as possible, to time the termination appropriately. If we can help with this, please contact us.